PUBLIC
INVESTOR PRESENTATION
March 2019
INVESTOR PRESENTATION March 2019 PUBLIC Forward-Looking - - PowerPoint PPT Presentation
INVESTOR PRESENTATION March 2019 PUBLIC Forward-Looking Statements This presentation includes forward-looking statements including, but not limited to, statements regarding Coca-Cola eceks (CCI) plans, objectives, expectations and
PUBLIC
March 2019
PUBLIC
This presentation includes forward-looking statements including, but not limited to, statements regarding Coca-Cola İçecek’s (“CCI”) plans, objectives, expectations and intentions and other statements that are not historical facts. Forward- looking statements can generally be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “plan,” “target,” “believe” or other words of similar meaning. These forward-looking statements reflect the current views and assumptions of management and are inherently subject to significant business, economic and other risks and uncertainties. Although management believes the expectations reflected in the forward-looking statements are reasonable, at this time, you should not place undue reliance on such forward-looking statements. Important factors that could cause actual results to differ materially from CCI’s expectations include, without limitation: changes in CCI’s relationship with The Coca-Cola Company and its exercise of its rights under our bottler's agreements; CCI’s ability to maintain and improve its competitive position in its markets; CCI’s ability to obtain raw materials and packaging materials at reasonable prices; changes in CCI’s relationship with its significant shareholders; the level of demand for its products in its markets; fluctuations in the value of the Turkish Lira or the level of inflation in Turkey; other changes in the political or economic environment in Turkey or CCI’s other markets; adverse weather conditions during the summer months; changes in the level of tourism in Turkey; CCI’s ability to successfully implement its strategy; and other factors. Should any of these risks and uncertainties materialize, or should any of management’s underlying assumptions prove to be incorrect, CCI’s actual results from operations or financial conditions could differ materially from those described herein as anticipated, believed, estimated or expected. Forward-looking statements speak only as of this date and CCI has no obligation to update those statements to reflect changes that may occur after that date.
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Overview of CCI FY18 Highlights Strategic Priorities Financial Highlights
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✓ Proven track record of expansion & growth ✓ Robust performance across all key markets with solid topline growth ✓ Abundant potential in demographics ✓ Compelling NARTD* growth opportunity in our footprint ✓ Strategy, Execution and People to accelerate quality growth ✓ Disciplined financial management to deliver stakeholder value
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*Non-alcohol ready-to-drink
Overview of CCI
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Figures reflect FY 2018 numbers unless otherwise stated (1) Unit case, 1 UC equals 5,678 liters (2) As of FY2018
49% 26% 10% 8% 7% Turkey Pakistan Kazakhstan Iraq Others
Volume Breakdown (2)
Sparkling Market Position
#1 #2 #1 #2
Overview
KAZAKHSTAN KYRGYZSTAN TAJIKISTAN TURKMENISTAN AZERBAIJAN TURKEY IRAQ JORDAN SYRIA PAKISTAN
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44% 23% 12% 21% Turkey Pakistan Kazakhstan Others
Revenue Breakdown (2)
36% 64% Turkey International
EBITDA Breakdown (2)
Overview of CCI
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EBITDA
CAGR 2005-2018 Single country in 2005… Expanding into Central Asia and North Iraq in 2006-2007… JV in Pakistan in 2008... A regional bottler today…
318 mn UC 1,315 mn UC
REVENUE
CAGR 2005-2018
VOLUME
CAGR 2005-2018
9x 4x 10x
South Iraq in 2012… 6 Overview of CCI
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4,1% 20,8% 26,2% 6,3% 26,6% 35,7%
Volume Revenue EBITDA 2017 2018
Accelerating quality growth
10,4% 16,4% 11,8% 17,6%
EBIT Margin EBITDA Margin 2017 2018
642 729 730
2016 2017 2018
Accelerating quality growth Continued margin expansion Another year of solid FCF
Delivering on our guidance with strong financial performance
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Highest net revenue & EBITDA growth
Revenue Growth Management & effective hedging Focus on working capital and capex efficiency GROWTH YOY MARGIN % TL MILLION
FY18 Highlights
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1,4% 3,3% 4,8% 2016 2017 2018
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volume in 2018
3,2% 4,1% 6,3% 2016 2017 2018
TURKEY INTERNATIONAL CONSOLIDATED
volume in 2018
volume in 2018
5,2% 4,9% 7,8% 2016 2017 2018 UNIT CASE VOLUME GROWTH YOY
FY18 Highlights
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SPARKLING STILLS WATER NRTD TEA
6.8%
11.6% 7.0% 6.0% 11.5%
% in Total Mix (2018)* 71% 7% 14% 9% 59 mn UC incremental Sparkling volume in 2018
TOTAL
0.6% 6.3% 4Q18 2018
UNIT CASE VOLUME GROWTH YOY
* Totals may not foot due to rounding differences
FY18 Highlights
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4,8% 6,1% 6,9% 18,7% 34,4%
Volume Volume (excl. NRTD Tea) Transactions (excl. NRTD Tea) Net Revenue EBITDA*
1,7% 5,7% 2016 2017 2018
Accelerating Volume Growth Increasing IC Share
20% 22% 23% 2016 2017 2018
Higher Share of Sugar Free**
5,3% 5,7% 6,8% 2016 2017 2018
…driven by Strong Sparkling momentum Highest volume growth in 7 years…
Above 30% volume growth in ‘Coca-Cola No Sugar’
2018 GROWTH YOY
* EBITDA excluding other operating income/expense * *Share of No Sugar & Light in Sparkling
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YoY % in Sparkling % in Sparkling
FY18 Highlights
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7,3% 3,9% Pakistan Iraq Focus on efficiencies & core Sparkling 10th Year of Pakistan Operation
Sales Volume
(mn UC)
93 335
2008 2018
3.6x
Sparkling Market Share*
*Source: Canadean
Double-digit volume growth in Coca-Cola trademark Above- industry growth in Sparkling
Production Capacity (mn UC)
3.6x
112 408
2008 2018
+2 pp in 2018
2018 VOLUME GROWTH YOY
FY18 Highlights
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14,1% 29,7% Kazakhstan Azerbaijan Double-digit volume growth in key markets Accelerating growth and gaining share
Azerbaijan
7,0% 12,7% 2016 2017 2018
Accelerating CA Volume Growth Gaining Market Share in Kazakhstan
49% 49% 51% 2016 2017 2018
Highest-ever sales volume in Kazakhstan Fuse tea reached #1 position in Kazakhstan Above 30% volume growth in Sparkling in Azerbaijan
Source: Nielsen
fastest growing country in TCCC system in 2018
2018 VOLUME GROWTH YOY
YoY
FY18 Highlights
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Strategic Priorities
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Customer & Consumer
Being the preferred partner of our customers, offering our consumers a wide choice of products fit for every lifestyle and
Community
Being a good corporate citizen
People
Great place to work
CREATE VALUE
Be the Best FMCG Company Across
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Accelerate Growth Win at the Point of Sale Exercise Financial Discipline Win with People
Management (RGM)
improvements
“OnePeople”
ONE C E CCI CI
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CCI Value Share Opportunity
9% CAGR
2018- 2021E
8% 9% 51% 29%
WATER STILLS SPARKLING NARTD
INDUSTRY VALUE GROWTH
Source: Nielsen, Canadean and internal estimates, data as of 2018
TOTAL NARTD INDUSTRY IN CCI COUNTRIES: $13BN (2018)
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Sparkling 71% Sparkling 85%
Water 14% NRTD Tea 9% Still 7% Other 15%
2006
2018
SHARE OF LOW/NO CALORIE IN SPARKLING VOLUME (2018) CATEGORY BREAKDOWN Increasing Household Penetration Double-digit growth in No Sugar
&
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27% 16% 8% 6% 7% 6% 4% 3% 2% 2% 1% 0,3%
Strategic Priorities
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59% 50% 40% 35% 28% 24%
Asia Pacific North America World Average Europe, Middle East and Africa Latin America CCI
Share of Immediate Consumption (IC) Packages in Sparkling
You
lation in in CCI I countries
Teen Recruitment Opportunit ity!
* Based on CCI analysis for Turkey operations
NSR per case
~1.5x
higher Gross Margin vs. FC
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Turkey 49% Pakistan 26% Kazakhstan 10% Iraq 8% Others 7% Turkey 81% International 19% 2006
2018
Volume Breakdown Guiding principles for geographical expansion
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Towards Vision 2025 Business Excellence
Fix Foundation for Real Value Creation Build New (CCI 3.0) Operating Model
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Financial Highlights
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World Sugar Prices (London#5 Average, USD/tonne) Resin Prices (Average, USD/tonne) LME Aluminium Prices (Average, USD/tonne) Hedged Position for 2019*
100%** 66% 58%
*As of February 2019 **For unregulated markets
impact on input costs: Hard currency cash allocation for FX-denominated raw material purchases
material purchases is hedged at USD/TRY 3.95
due to designation of cash
Hedging FX exposure related to raw material...
100 200 300 400 500 2017 2018 500 1000 1500 2000 2017 2018 500 1000 1500 2017 2018
Financial Highlights
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Accelerating quality growth Net Debt (USD mn) Net Debt / EBITDA Net Interest Coverage
2,1 1,5 1,4 2016 2017 2018
6,6 9,7 9,0
2016 2017 2018 652 555 500 2016 2017 2018 Continued deleveraging FX-Neutral Net Debt/EBITDA: ~1.2x Covenant < 3.25x Covenant > 4x Lower Net Interest Coverage due to cross-currency swap
Financial Highlights
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USD 75% USD 33% Euro 23% Euro 21% 41%
Local Currency 2% Local Currency 5%
2017 2018
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Accelerating quality growth Breakdown of Consolidated Debt
Participating cross-currency swap transaction for USD 150 mn Net investment hedging for USD 281 mn Repayment of USD 100 mn USPP (May 2018) Repayment of USD 500 mn Eurobond (October 2018)
Cross- currency swap & Net Investment Hedging
Maturity Profile
19% 12% 2% 2% 15% 51%
2019 2020 2021 2022 2023 2024
USD 80 mn USPP USD 120 mn USPP USD 500 mn Eurobond
Financial Highlights
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4%
2017 15 Days Cash Conversion Cycle 2016 26 Days
26 Days 2018 47 Days 62 Days
DSO DSI DPO
*Net Sales Revenue
Net Working Capital/NSR*
7,4% 5,7% 4,5% 2016 2017 2018 FULL YEAR
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30 Days 2016 47 Days 51 Days 29 Days 2017 43 Days 57 Days
2018 12 Days
Financial Highlights
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7,3% 5,9% 8,1%
2016 2017 2018
7.1%
average
*Net Sales Revenue
CapEx / NSR*
FULL YEAR
Financial Highlights
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6% 6% 10%
EBITDA Growth
Prudent CapEx Working Capital Efficiency
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Free Cash Flow and Yield*
*Free cash flow yield based on year-end Mcap
10 46 642 729 730
0,1% 0,5% 7,6% 8,2% 9,4%
0% 2% 4% 6% 8% 10%
100 200 300 400 500 600 700 800
2013 2014 2015 2016 2017 2018 FCF (TLmn) FCF Yield Financial Highlights
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ORGANIC GROWTH INORGANIC GROWTH DELEVERAGING SHAREHOLDER RETURN
CapEx/Sales ~7% - 8% (2018E)
Bolt-on acquisitions Geographical expansion
Optimum debt repayment
metrics Sustainable dividend policy
Optimum CapEx Allocation Debt Repayment Dividends Selective M&A Strategy
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1 FX-Neutral: Using constant FX rates when converting country P&L’s to TL.
Financial Highlights
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(TL million) 4Q18 YoY Change 2018 YoY Change Net Sales 2.001 22,9% 10.623 26,6% Gross Profit 573 10,7% 3.527 27,2% EBIT (17) (140,1%) 1.255 43,6% EBITDA 147 (13,4%) 1.871 35,7% Net Income / (Loss) 148 n.m. 327 37,5% GP Margin 28,6% (320 bps) 33,2% 20 bps EBIT Margin (0,9%) (350 bps) 11,8% 140 bps EBITDA Margin 7,4% (300 bps) 17,6% 120 bps EPS* 0,58 n.m. 1,28 37,5%
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*EPS in TL per 100 shares
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*Comparable ** Organic and FX-neutral
Medium-Term 2018-2020 Volume growth 4% - 6% (CAGR) Net Revenue growth (FX neutral) 10% - 12% (CAGR) EBITDA Margin Slight improvement Capex / Sales 7% - 8%* Net Debt / EBITDA < 1.5x**
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Dividend per Share (TL per 100 shares)
years
0,12 0,20 0,79
2015 2016 2017
* Based on market capitalization as of 18th May
Dividend Yield: 0.3% Dividend Yield: 0.5% Dividend Yield: 2.1%
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Population (mn)(1) GDP per cap (PPP) (USD 000) (2) Per capita NARTD consumption (3) CCI's Market Share in Sparkling (4) CCI's Market Position in Sparkling Turkey 82 28,3 58 65% 1 Pakistan 201,0 5,7 27 42% 2 Kazakhstan 18,5 27,5 79 51% 1 Iraq 39,8 16,9 51 43% 2 Azerbaijan 9,9 18 37 74% 1 Jordan 9,9 9,4 45 24% 2 Turkmenistan 5,8 19,5 28 n.a. n.a. Kyrgyzstan 6,4 3,8 37 69% 1 Tajikistan 9,1 3,4 16 n.a. n.a.
Source: (1,2) IMF World Economic Outlook (3) CCI and TCCC estimates (4) Nielsen, Canadean
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TR, KZ, PK, IQ 150,000 Youth
880 volunteers, 100,000 beneficiaries
24 plans, 750,000 beneficiaries
BIST 50 Sustainability Index
Included in Leading Sustainability Indices
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CCI Investor Relations Tel : +90 216 528 4000 Fax: +90 216 510 7010 CCI-IR@cci.com.tr www.cci.com.tr
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